SECOND AMENDMENT
TO
AGREEMENT AND PLAN OF
MERGER
This Second Amendment to Agreement and Plan of
Merger
(this " Amendment ") is made and entered into as of June 20,
2009 by and among Pomeroy IT Solutions, Inc., a Delaware
corporation (the " Company "), Hebron LLC, a Delaware
limited liability (" Parent "), Desert Mountain Acquisition
Co., a Delaware corporation and a wholly owned subsidiary of Parent
(" MergerSub ") and David B. Pomeroy, II, an individual ("
Buyer "). Capitalized terms used in this
Amendment and not otherwise defined herein shall have the meaning
ascribed to such terms in that certain Agreement and Plan of Merger
dated as of May 19, 2009, as amended by the First Amendment to
Agreement and Plan of Merger dated June 8, 2009 (collectively, the
" Merger Agreement ") by and among Parent, Merger Sub, the
Company and with respect to Sections 7.01(c), 7.08, 7.10, 9.03(e)
and 9.03(f) only, Buyer.
Recitals
A. Parent,
Merger Sub, the Company and Buyer previously entered into the
Merger Agreement.
B. Parent,
Merger Sub, the Company and Buyer now desire to further amend the
Merger Agreement as set forth herein.
C. The
Merger Agreement may be amended pursuant to Section 10.04 thereof
by the parties thereto by action taken by their respective boards
of directors (or similar governing body or entity) at any time
prior to the Effective Time.
Agreement
In consideration of the premises and mutual
agreements set forth herein, and intending to be legally bound
hereby, the parties hereto agree to amend the Merger Agreement as
follows:
1.
Amendment to the First Whereas Paragraph. The
first Whereas paragraph shall be amended such that the reference to
"$5.02 per share" contained in Subsection (ii) of the first Whereas
paragraph is hereby deleted in its entirety and replaced with
"$6.00 per share".
2.
Amendment to Section 1.01. Section 1.01 of the
Merger Agreement shall be amended such that the following
definition of " ESPP " is hereby inserted:
"" ESPP
" means the Company's 1998 Employee Stock Purchase Plan, as
amended."
3.
Amendment to Section 1.01. Section 1.01 of the
Merger Agreement shall be amended such that the definition of "
Expenses " is hereby deleted in its entirety and replaced
with the following:
"" Expenses "
shall mean all out-of-pocket expenses, including all fees and
expenses of accountants, investment bankers, legal counsel,
financing sources and consultants incurred by a party or on its
behalf in connection with or related to the transactions
contemplated by this Agreement and any amendment thereto,
Acquisition Proposal, Superior Proposal or Company Adverse
Recommendation Change."
4.
Amendment to Section 3.01(e). Section 3.01(e) of
the Merger Agreement shall be amended such that it is hereby
deleted in its entirety and replaced with the following:
(e) Each
share of Company Restricted Stock that is vested or becomes vested
as of the Effective Time shall be considered an outstanding share
of Company Common Stock for all purposes of this Agreement,
including the right to receive the Company Common Stock Merger
Consideration. The term " Company Restricted
Stock " shall mean any outstanding share awards that were
granted pursuant to each of the Company's 2002 Amended and Restated
Stock Incentive Plan, 2002 Amended and Restated Outside Directors'
Stock Option Plan and ESPP (collectively, the " Incentive
Plans "). Each share of Company Restricted Stock
that is not vested as of the Effective Time shall be forfeited and
cancelled.
5.
Amendment to Section 6.01(c). Section 6.01(c) of
the Merger Agreement shall be amended such that it is hereby
deleted in its entirety and replaced with the following:
(c) (i)
except as set forth in Section 6.01(c) of the Disclosure Schedule,
authorize for issuance, issue or sell or agree or commit to issue
or sell any shares of any class of capital stock of the Company or
any Subsidiary or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest, of the Company or any
Subsidiary, other than the issuance of Company Common Stock upon
exercise of Company Stock Options or vesting of Company Restricted
Stock outstanding on the date of this Agreement or Company Common
Stock issued pursuant to the ESPP with respect to the six-month
offering period beginning January 1, 2009; (ii) adopt any new
incentive plan or any equity based compensation plan; (iii)
repurchase, redeem or otherwise acquire any securities or equity
equivalents except in connection with the exercise of Company Stock
Options or the vesting of Company Restricted Stock or the lapse of
restrictions on Company Restricted Stock; (iv) reclassify, combine,
split, or subdivide any stock of the Company or any Subsidiary; or
(v) set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any
of the capital stock of the Company or any Subsidiary;
6.
Amendment to Article VI. Article VI of the
Merger Agreement shall be amended such that the following new
Section 6.02 is hereby inserted:
"Section 6.02 ESPP. With respect to
the ESPP, the Company (i) shall not permit any new offering periods
under such plan to be initiated after the date hereof, (ii) shall
take such actions as
